Griffin Heirs Sell Alico to N.Y. Group

Agricultural firm was sold to take advantage of federal tax break.

Published: Friday, October 18, 2013 at 8:28 p.m.

Last Modified: Friday, October 18, 2013 at 8:28 p.m.

WINTER HAVEN | Atlantic Blue Group, the Lake Wales company formed from the estate of the late Frostproof citrus baron Ben Hill Griffin Jr., has reached an agreement to sell its majority share in Alico Inc. to two New York City-based agricultural companies.

Arlon Group and 734 Agriculture LLC will purchase Atlantic Blue's 51 percent share of the Fort Myers-based agribusiness for $137.8 million, or $37 per share, the companies announced Friday in a press statement. Arlon Group will hold a minority share among the two companies, said Josh Passman, their spokesman.

The deal is expected to close before the end of the year, the statement said.

Minority investors reacted negatively to the deal, sending Alico's stock price down 11 percent on the Nasdaq exchange at the close of trading Friday. The stock lost $4.57 per share, closing at $38.43 from Thursday's close of $43.

"I think the investing public expected a much higher price," said Don Dion of DRD Investments Inc. of Naples, an Alico shareholder. "I am very unhappy that the families (Griffin heirs) sold half the company for $37. Investors in Alico in general are very unhappy and poorer today."

But Baxter Troutman, an Atlantic Blue board member, former Alico director and a Griffin grandson, responded that the price was the best available, based on Atlantic Blue's financial advisers.

"After our very detailed analysis, we felt this $37 was a very reasonable offer," said Troutman, who holds the largest block of Atlantic Blue shares.

Alico owns 130,800 acres of mostly agricultural land in Florida, including 5,300 citrus acres and 2,900 acres of cattle pasture in Polk County.

Atlantic Blue announced in January it would sell its 3.7 million shares in Alico to take advantage of a tax break created that month as part of the deal between Congress and the president to avert the so-called fiscal cliff, or the expiration of tax breaks on Jan. 1. Economists warned the sudden increase in so many taxes would harm the economy.

The tax break is available only on transactions completed this year. It allows the owners of Chapter S corporations, such as Atlantic Blue, to avoid paying both corporate and personal taxes on profits from the sale of certain assets.

Atlantic Blue sold other assets earlier this year, including two Winter Haven hotels and some residential developments, Troutman said.

Family members are still considering offers to purchase other Atlantic Blue properties, including Phoenix Industries LLC, a trucking and warehouse company in Winter Haven; the Blue Head Ranch and Blue Head Farms on about 65,000 acres in Highlands and DeSoto counties; and the 490-acre Tri-County Grove in Highlands County, Troutman said.

The new majority owners will continue to operate the Alico holdings as agricultural operations, which includes citrus, cattle and sugar, Passman said.

NEW CEO NAMED

The new owners said they will hire Clay Wilson, a third-generation Florida citrus grower with 28 years experience, as the new CEO, replacing J.D. Alexander, an influential former state senator and a Griffin grandson. Wilson also serves as CEO of two other 734 Agriculture citrus subsidiaries.

Troutman expressed confidence the new owners would operate as good agricultural stewards.

"It's kind of bittersweet, but the end of an era can be the dawn of a new era," Troutman said. "Alico and its assets are deeply entwined in Florida citrus. I don't think there's any question about their expertise in the citrus industry and agriculture as a whole."

Atlantic Blue was formed in February 2004 after the settlement of a lawsuit between Ben Hill Griffin III, the citrus baron's only son, and the families of his four daughters: Sarah Alexander, Lucy Anne Collier, Harriet Harris and Francie Milligan. The estate's value was estimated at $300 million when Griffin Jr. died in 1990.

Private investors Remy Trafelet and George Brokaw own 734 Agriculture and will join the Alico board along with Wilson.

Arlon is a global food and agriculture company with about $850 million in assets in Brazil and China. Ben Fishman, its managing owner, will also join the Alico board.

[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-401-6980. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]

<p>WINTER HAVEN | Atlantic Blue Group, the Lake Wales company formed from the estate of the late Frostproof citrus baron Ben Hill Griffin Jr., has reached an agreement to sell its majority share in Alico Inc. to two New York City-based agricultural companies.</p><p>Arlon Group and 734 Agriculture LLC will purchase Atlantic Blue's 51 percent share of the Fort Myers-based agribusiness for $137.8 million, or $37 per share, the companies announced Friday in a press statement. Arlon Group will hold a minority share among the two companies, said Josh Passman, their spokesman.</p><p>The deal is expected to close before the end of the year, the statement said.</p><p>Minority investors reacted negatively to the deal, sending Alico's stock price down 11 percent on the Nasdaq exchange at the close of trading Friday. The stock lost $4.57 per share, closing at $38.43 from Thursday's close of $43.</p><p>"I think the investing public expected a much higher price," said Don Dion of DRD Investments Inc. of Naples, an Alico shareholder. "I am very unhappy that the families (Griffin heirs) sold half the company for $37. Investors in Alico in general are very unhappy and poorer today."</p><p>But Baxter Troutman, an Atlantic Blue board member, former Alico director and a Griffin grandson, responded that the price was the best available, based on Atlantic Blue's financial advisers.</p><p>"After our very detailed analysis, we felt this $37 was a very reasonable offer," said Troutman, who holds the largest block of Atlantic Blue shares.</p><p>Alico owns 130,800 acres of mostly agricultural land in Florida, including 5,300 citrus acres and 2,900 acres of cattle pasture in Polk County.</p><p>Atlantic Blue announced in January it would sell its 3.7 million shares in Alico to take advantage of a tax break created that month as part of the deal between Congress and the president to avert the so-called fiscal cliff, or the expiration of tax breaks on Jan. 1. Economists warned the sudden increase in so many taxes would harm the economy.</p><p>The tax break is available only on transactions completed this year. It allows the owners of Chapter S corporations, such as Atlantic Blue, to avoid paying both corporate and personal taxes on profits from the sale of certain assets.</p><p>Atlantic Blue sold other assets earlier this year, including two Winter Haven hotels and some residential developments, Troutman said.</p><p>Family members are still considering offers to purchase other Atlantic Blue properties, including Phoenix Industries LLC, a trucking and warehouse company in Winter Haven; the Blue Head Ranch and Blue Head Farms on about 65,000 acres in Highlands and DeSoto counties; and the 490-acre Tri-County Grove in Highlands County, Troutman said.</p><p>The new majority owners will continue to operate the Alico holdings as agricultural operations, which includes citrus, cattle and sugar, Passman said.</p><p>NEW CEO NAMED</p><p>The new owners said they will hire Clay Wilson, a third-generation Florida citrus grower with 28 years experience, as the new CEO, replacing J.D. Alexander, an influential former state senator and a Griffin grandson. Wilson also serves as CEO of two other 734 Agriculture citrus subsidiaries.</p><p>Troutman expressed confidence the new owners would operate as good agricultural stewards.</p><p>"It's kind of bittersweet, but the end of an era can be the dawn of a new era," Troutman said. "Alico and its assets are deeply entwined in Florida citrus. I don't think there's any question about their expertise in the citrus industry and agriculture as a whole."</p><p>Atlantic Blue was formed in February 2004 after the settlement of a lawsuit between Ben Hill Griffin III, the citrus baron's only son, and the families of his four daughters: Sarah Alexander, Lucy Anne Collier, Harriet Harris and Francie Milligan. The estate's value was estimated at $300 million when Griffin Jr. died in 1990.</p><p>Private investors Remy Trafelet and George Brokaw own 734 Agriculture and will join the Alico board along with Wilson.</p><p>Arlon is a global food and agriculture company with about $850 million in assets in Brazil and China. Ben Fishman, its managing owner, will also join the Alico board.</p><p>[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-401-6980. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]</p>